The Wall Street Bailout – Is Corporate Welfare Good for Domestic Security?

(Compiler's note: I've simply printed here the bottom line, so you may well want to read the entire -- must read -- article for necessary perspective. rca)

Dr. Robin McFee bailout

The government wants to spend its way out of another financial crisis…this time to the tune of $700 billion. They toss numbers around like it was lunch money. A trillion dollars here, a trillion dollars there….where will it end? The problem is, it is OUR money and it could be spent better.

A trillion dollars can buy a lot of preparedness.

....Make no mistake about it – our security is inextricably linked with our economic stability. The economic downturn has opened the United States up to numerous vulnerabilities as competing demands settle in.

Selling our borders.

The ripple effect of the financial markets and economy can be seen in the disaster called the South Florida real estate market which has left tens of thousands of condominium units for sale – many oceanfront or on the vital Intracoastal Waterway. Who is buying these up? Buyers from nations shall we say less than friendly to the U.S. (Russia, the Middle East) and South Americans, including Venezuelans – those same happy folks represented by President Chávez who also plays host to extremist Muslim terrorist organizations, purchases inordinate amounts of high tech weapons from Russia, and has made it no secret his antipathy for all things U.S., except of course our assets. We are selling off valuable and potentially strategic real estate to foreign interests. It is well known that the Russian Mob has purchased large chunks of real estate in New York and increasingly has set its sights on other important coastal areas from the Northeast to South Beach. Does this make sense? Are we so profit and money driven that we sell our souls and our resources to the first cash dropped in our hand?

Selling our financial notes

All countries trade in other nations’ currencies, purchase the treasury instruments of other countries and invest geoglobally. While that is all well and good in an ideal world where everyone plays fair and shares a social compact, one wonders how sound it is to write checks that some of our biggest rivals – China and Russia ultimately cash? They are hard currency rich and we need it. Are they propping up our cash flow? You decide. Never the less it is bad policy to spend ones household or country into debt to the point that loans, selling off shares of U.S., Inc and other practices are needed to get through the week.

Trade imbalance/worker imbalance

Creating a system where our biggest companies no longer hold allegiance to their native land instead choosing to go to the place of least resistance and greatest profit may be financially savvy in the short term but has caused the abandonment of the American worker, development of an offshore economy and trade imbalance that is out of control. Our foolish trade practices have allowed an unfair advantage abroad at untold cost in morale, money and economic stability to the U.S. Where was Congress, Sec. Paulson, his several predecessors over the last two administrations and Presidents Clinton and Bush as the Wal-Mart effect emerged?

Our role in this debacle

We spent more than we made; that could easily be said by the folks on Wall Street or Main Street. Irresponsible credit practices have hurt this nation. No question bad things happen to people – unexpected financial crisis, health expenses, deaths and unforeseen events. But those scenarios are not representative of the majority of debt burdened Americans. We need to become a financially responsible public – starting with the grown ups but clearly demanding that financial literacy be taught in our schools. It rarely is and such money ignorance will continue to hamper us.

Our leaders have created an environment whereby corporate profit trumps domestic security. With the number of leadership changes at numerous government agencies, low morale, rampant organizational inefficiencies, interagency challenges and sometimes outright failures across the board by Congress and the Administration, it can be argued Washington is broken. Given the dizzying number of lobbyists per Congressman, Senator, Cabinet member, candidate and civic leader offering soft landings and other attractive perks, the constituency of “K” street has outplayed “Main Street.” Instead of complaining about it, we as citizens must share some of the responsibility.

First – A government is only as good as the candidates we elect, the rules of engagement we create or allow to be created and the benchmarks or expectations we hold our officials to. Understanding how legislation is passed – the intended way and the real back room way is akin to trying to connect the dots in a Jackson Pollack picture. Though some parts of government by necessity need to be classified and top secret or higher, much of it should be transparent. The average citizen shouldn’t need a degree from the Fletcher School of Government to figure out how to get things done. But the average citizen should expend a little more energy in the political process given it is a government “of the people” – that’s us!

Participation via YouTube and chat rooms isn’t the answer. If you have a concern – contact your elected official. Remember they work for you! You put them in office and they presumably ran to serve. Well hold them to it! Find out what they are doing. Are your officials showing up? Are they voting? Are they looking out for you?

Second – Our voting effort is shameful. Where much of the peoples of the world do not have even the barest ability to vote for anything substantive or resulting in meaningful changes in their lives, we have an abundance of freedoms to influence our elected leaders – and we waste those opportunities. Our elected officials know this and can thus target their efforts to the demographics that truly matter to them – those who donate, those who campaign and those who show up to vote. Senator Obama beat Senator Clinton because he understood the key constituents necessary to win the primary. Every citizen should vote – period. Even if you don’t like the candidates – show up and write your own name on the ballot…it is your right to do so!

Third – We must become part of the process. It is very likely Congress will approve of some form of bailout. You have become the ultimate Bank of the U.S. Your wallet is the treasury. Make sure your representatives include in this “loan” from you to Wall Street a way to get reimbursed with interest! No CEO in a bailed out company gets to draw more than his government grade equivalent and no bonuses or options until the American people have been paid back. But Congress won’t watch out for you if they don’t think you are watching them!

What needs to be done?

For starters why just bail out the financial industry? Most of my medical students will graduate with between $140,000 and $200,000 in student loans; want to guess why most of them CAN’T (not won’t) go into primary care? The government sets the reimbursements, also oversees the management of student loans (beginning to see a pattern here?). What can be more fundamental to the stability of the nation than making sure enough doctors exist – a twist on Paulson’s argument for the well being of the U.S. based upon the economic model. I say let’s bail out medical students (and their attending physicians who also have student loans) on the assumption health underscores the well being of the U.S. Then after we’ve spent that trillion, let’s go for the food industry – it’s tough milking cows in Minnesota during the winter. Then let’s build an 800 mile wall to keep folks out. Oh, we already authorized that, we just haven’t built it. Hmmm. Where else can we drop a trillion? Rickety bridges? Elder care? How about Social Security?

Assuming we have to pump some money into the profiteers of Wall Street, let’s consider the following:

First we DO NOT under any circumstances allow Secretary Paulson a fiefdom and a trillion dollars…that is too much power and money concentrated at the discretion of someone who already failed miserably at his duty to protect the American people.

Second, we create a bipartisan (translation both parties play nice – this is the future of our country, check the rivalry and “I gotcha” at the door) oversight team from Congress and the Administration, and bring in the best and brightest financiers as the action team. Also need to bring in and work with security, health, public preparedness, urban and suburban leaders – this bailout will have a ripple effect on virtually every domain of public life – as such stakeholders from a wide range of arenas should be at the table from the onset anticipating problems and sharing insights as well as possible solutions before the morass that this bailout will become grows out of hand.

Third, the companies that receive the bailout need to understand a few ground rules:

They work for the interests of the American public until such time as the debt – ALL of it is repaid. The senior management signs the IOU. They are responsible in word, deed and by law to do everything they can to position their companies to pay the debt. The senior leaders will have a choice – get paid at government pay grades or what Lee Iacocca earned when Chrysler got bailed out. No golden parachutes.

Fourth, the American public is the de facto shareholder of these assets and should be compensated. We authorized our government funds we provided through taxation to be used judiciously. The Framers never envisioned this sort of bail out…such a wanton abandonment of fiduciary responsibility towards the public by officials and did not endorse the use of taxes for such purposes as sponsoring private enterprise. As such, “we the people” should enjoy some of the benefits of investment – and receive a “bonus” ever year based upon the prorated amount per capita we ultimately invest in the bailout. Consider it a ‘dividend” of sorts.

Fifth – every proceeding, every nickel and every benchmark is to be made public.

The future

While in Toronto, several security colleagues quipped “the U.S. is still a great nation, respected up here, and can remain a global leader, even though you don’t have any money.” You know things are bad when the Canadians feel sorry for the U.S.! The fact remains, unless we get our house in order we will quickly become a second rate economy with a first rate military. Global leadership requires more than Raptors and Stealth Bombers. The world has always admired our economic strength, and our innovation – Yankee ingenuity. This latest Wall Street debacle should be relished for the opportunity it presents us to reexamine who we are and where we are going as a society. Newt Gingrich was on target when he suggested buying our way out of this problem isn’t the solution.

The economy must be addressed and it will cost us; whether it is a trillion dollars or not remains to be seen.

America is a great, ingenious and strong nation. Our people are strong, resilient and dedicated. But we can only take so many misadventures. It is time for Washington to remember their duty to the people and it is time for the people to take a more hands on interest in how the government works. The Wall Street bailout may be the catalyst that awakens citizen interest and participation in government. The disruption of the financial market is an example of government getting caught asleep at the controls, and illustrates the direct correlation between government failure having a direct impact upon the daily lives of the average person. Though painful, it is a reminder that when we don’t have a hands-on approach to government, sometimes our government doesn’t take a hands-on approach to governing.

As we enter the last months of this election season both candidates should be mindful of the fragility of greatness and the need for both parties to work together for the common good. The thirst for victory and the incentives associated with party politics can often overshadow what should be the ultimate reason to run for office – a sense of duty, a sense of service and doing what is right for the nation. The next administration has before it a long list of lessons to be learned from and mistakes not to be repeated. The good news for this administration – it’s almost over – which means there is time to leave a legacy of good. So whatever the administration does in the last remaining months to start us on the way to a solution, even if it means telling us just how extensive the “how bad it is” really is, can in the end be one of the most important acts and contributions President Bush can do for the American public.

FamilySecurityMatters.org Contributing Editor Dr. Robin McFee is a physician and medical toxicologist. An expert in WMD preparedness, she is a consultant to government agencies, corporations and the media. Dr. McFee is a member of the Global Terrorism, Political Instability and International Crime Council of ASIS International. She has authored numerous articles on terrorism, health care and preparedness, and coauthored two books: Toxico-Terrorism by McGraw Hill and The Handbook of Nuclear, Chemical and Biological Agents, published by Informa/CRC Press.